Hamilton Pratt

Acquisition and Use of Your Chosen Property

Before you acquire a property, you and your property agent should establish that the property is physically suitable for your business and that your proposed use of the property is permitted by local government planning regulations and environmental regulations, either national or local.

The UK government charges property transfer tax (known as stamp duty) by reference to the purchase price of or rent payable on the property. In addition, land registry fees are payable on the transfer of all freehold or leasehold properties if in excess of 21 years is granted or transferred.

In nearly all cases, value added tax (VAT) is payable on the sales price or rent in respect of commercial properties.  However, with certain exceptions, any VAT paid by the buyer or tenant is usually recoverable if the buyer/tenant complies with certain tax formalities.

Property Tax

Business properties are also subject to an annual local property tax, the “Uniform Business Rate”, irrespective of the profits or income of the occupier. Each property is assigned a “rateable” value, which varies according to the size and the location of the property.  The local government authority levies tax (known as “rates”) at a percentage of that value.

In addition, other rates are payable for services provided by the local water authority such as water and sewerage.

Environmental Issues

Following the implementation of the Environmental Protection Act 1990 and the Environment Act 1995, environmental issues have become increasingly important to businesses in the UK.  The significance of environmental concerns will largely depend on the nature of your business and, in practice, are unlikely to have a major impact on non-UK franchisors establishing in the UK.